Coal India Files Draft Papers for 10% Stake Sale in Mahanadi Coalfields via IPO

State-run Coal India, recognized as the world's largest coal producer, has filed draft papers with the market regulator to sell a 10% stake in its fully owned subsidiary, Mahanadi Coalfields, through an initial public offering (IPO).

According to the prospectus dated Monday, Coal India is offloading up to 661.8 million shares in the unit. The subsidiary itself is not selling any new shares in the offering and will not receive any proceeds from the IPO.

Based in the eastern state of Odisha, Mahanadi Coalfields is a major contributor to the national energy sector. The unit accounted for 21% of India's overall domestic coal production and 28.4% of Coal India's total coal production in the fiscal year ended March 2026. Overall, Coal India contributed approximately 74% of India's total coal production during the same fiscal year. The parent company had previously stated in March that it could sell up to 25% stakes in subsidiaries Mahanadi Coalfields and South Eastern Coalfields through IPOs or other routes.

Financial details from the prospectus show that Mahanadi Coalfields' net profit slipped by about 1.3% to 106.78 billion rupees ($1.12 billion) in the year ended March 31, while revenue fell 2.6% to 305.5 billion rupees.

This filing follows the public listings of two other Coal India units earlier this year. Bharat Coking Coal went public in January and is currently down about 25% from its debut price, whereas Central Mine Planning & Design Institute has seen an increase of 39% since its March listing.

The Mahanadi Coalfields IPO filing coincides with a revival in India's primary market following a sluggish start to the year, which had experienced a selloff spurred by the U.S.-Israeli war on Iran.

The institutions managing the public offering include SBI Capital Markets, Axis Capital, BOB Capital Markets, IDBI Capital Markets & Securities, and IIFL Capital Services.

"The decision by Coal India to offload a 10% stake in Mahanadi Coalfields via an IPO reflects a strategic approach to unlocking value from key subsidiaries. While the subsidiary experienced slight dips in revenue and net profit for the fiscal year ended March 2026, its substantial share of domestic coal production provides a strong fundamental base. Tracking how this public offering performs will offer valuable insights into investor appetite for state-backed energy assets amid shifting market conditions." — Dr. Shishir Gupta, Founder & CEO, StartupLanes